The analysts point out total I-banking and trading revenues were strongest for UBS AG (NYSE:UBS), JPMorgan Chase & Co. (NYSE:JPM), and Bank of America Corp (NYSE:BAC) in 2013. As can be deduced from the following graph, UBS was the top performer exhibiting 17% year-on-year increase primarily due to outperformance in equities both in trading and ECM. JPMorgan and Bank of America also outperformed primarily due to relatively better fixed income trading results and investment banking revenues. However, Deutsche Bank AG (NYSE:DB) (ETR:DBK) and Barclays PLC (NYSE:BCS) (LON:BARC) underperformed due to weaker fixed income results, while softer equity trading results had the decaying effect on the growth of GS. Middle of the pack performance was posted by Citigroup Inc (NYSE:C), Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS).

The following graph highlights the revenue breakdown of the nine banks:

Strong advisory fee for C, BAC and GS

The Jefferies analysts point out that advisory fees declined 7% year-on-year with the U.S. banks holding flat on average and European banks down 22%. As can be deduced from the following graph, on a full-year basis, top performers included Citigroup, Bank of America and Goldman Sachs, while Credit Suisse, Deutsche Bank and JPMorgan lagged.

The analysts believe longer-term advisory volumes will grow at a healthy clip as potential buyers are currently flush with cash and have limited opportunities for ‘self-improvement’ going forward with operating margins already quite high.

Upbeat management outlook

The Jefferies analysts note that despite somewhat soft M&A volumes throughout 2013, commentary from management teams regarding pipelines and backlogs was fairly upbeat. Moreover, early indications point to a pretty good start to 2014.

The following table captures the management commentary on I-banking pipeline and backlog:

2014 could be another tough year for FICC

The Jefferies analysts note there was not much forward-looking commentary about fixed income trading expectations from management teams. The analysts believe fixed income trading comps will be tough in 2014. They point out with robust results posted in 1H13, they would find it hard to replicate the performance. The fixed income has to confront several challenges including slower primary issuance activity, elevated uncertainty about the direction of future interest rates, Volcker-related business adjustments and concerns about emerging markets. The analysts currently model low-to-mid single-digit year-on-year declines in fixed income trading revenues for Bank of America Corp (NYSE:BAC), Citigroup Inc (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM).